BPIC Signs Purchasing Agreement

By Greg RienziThe Gazette

The university's Business Processes Improvement Committee
has reached an agreement with Office Depot to provide commonly
used office and computer supplies at a significantly reduced cost
for all Hopkins-affiliated entities.

Seen as a "one-stop shopping" opportunity, the new
arrangement covers items including pens, folders, paper clips and
computer accessories, which can be ordered via the Internet with
next-day "desktop" delivery and billed directly through the
university's central accounting system.

The projected annual collaborative savings, once all
institutions are participating, is $477,000 based on current
expenditures.

The agreement with Office Depot, which provides price
protection for most items, will be for three years with the
option to renew for two additional years. The university and APL
plan to implement the program immediately; the health system
plans to do so in July 2002.

The agreement will be phased in gradually with full
implementation, including a dedicated Hopkins Web site for Office
Depot purchasing, expected by Jan. 1, 2001.

At that time, the university expects to also begin using
Office Depot as its primary supplier of copy paper.

Candice Dalrymple, chair of the BPIC's Collaborative
Purchasing work group, said that although Johns Hopkins
institutions were already receiving office supply discounts as
high as 52 percent, the work group felt that further enhanced
savings and service value could be obtained through the use of a
dedicated vendor. The Collaborative Purchasing committee was
initially formed by the BPIC in order to identify a number of
goods and services that could be purchased as "one gigantic
Hopkins contract" instead of through the individual purchasing
offices of the university, health system and the Applied Physics
Laboratory.

Candice Dalrymple, chair of
the BPIC's Collaborative Purchasing work group.

"Not purchasing things together means we aren't leveraging
our buying power effectively in the marketplace," said Dalrymple,
associate dean of university libraries and director of the Center
for Educational Resources at the MSE Library. "We also wanted to
make sure that accompanying these better prices we had
value-added features that would make it very attractive for the
individual person making an office supply order to use this one
particular vendor."

Currently, discounts on office supplies range from 45 to 52
percent under separate Johns Hopkins Institutions contracts with
three major vendors. Johns Hopkins Institutions spent a combined
$2.2 million, factoring in discounts, on office supplies in
fiscal year 1999.

The 11-member task force decided to focus its first-year
efforts on office supplies, Dalrymple said, because the purchase
of these "relatively innocuous" items would not infringe upon the
buying freedom of a particular office or individual.

"There were any number of items we could have begun to
investigate for cost savings--cell phones, refrigerators,
scientific experiment equipment; the list could go on ad
infinitum," Dalrymple said. "But we decided, since this was the
first time we ever tried to purchase collaboratively, it made
very little sense to tackle the more controversial items first
because what we might end up doing is getting a great price for a
piece of equipment that doesn't serve someone's purpose. For
example, an office may have loyalties to certain kinds of fax or
copy machines because they contain features and characteristics
that are very important to its specific mission."

The Business Process Improvement Committee was formed in
summer 1999 by President William R. Brody. Chaired by Al Sommer,
dean of the School of Public Health, BPIC is a wide-sweeping
initiative charged with examining everything about the way the
university and health system do business. Other current task
forces are examining mail services, travel, financial business
practices and administrative training for academic leadership.

After identifying office supplies as its initial target, the
Collaborative Purchasing task force in April issued a request for
proposal to 21 office supply companies. The submitted proposals
were reviewed by a subcommittee of the work group, which
subsequently narrowed the list to three vendors.

Dalrymple said it is expected that the new collaborative
contract will constitute about 80 percent of JHI office
purchases. Hopkins' departments and offices are encouraged to use
small, local and minority-owned businesses for the remaining 20
percent of the market share.

"We knew there was no way for these types of businesses to
compete on price alone, and we wanted to be fair to them,"
Dalrymple said.

To assess the impact of the agreement, the purchasing
offices of the university, health system and APL will assign
staff to monitor purchases made after the implementation of the
new contract.

In addition to the increased cost savings, the new contract
includes next-day delivery, sales support for each of the JHI
entities, special contract pricing at Office Depot's retail
stores, contract pricing and desktop delivery for copy paper and
Internet ordering and electronic invoicing capability.

"We wanted a way for the ordering system to tie into the
bookkeeping system of the university. We felt that was a very
important value-added feature," Dalrymple said. "So if you are
making an order on the Internet and enter in your account number,
the order would then go directly into the university's accounting
system. We did not want to have bills coming into the individual
offices and paper being shuffled around. Why not just have it
done by the automated system immediately?"

With the new contract in place, Dalrymple said the task
force has shifted its sights to year two of its existence.

Recommendations for the work group's 2000-2001 period of
service are twofold: to determine additional purchases that could
be brought into the new collaborative agreement and to
aggressively market the financial and administrative benefits of
the new contract.

"We understand this constitutes a huge change in behavior on
the part of our community. Some offices have long-standing
relationships with certain vendors," Dalrymple said. "So it up to
us to get the word out on this great deal."

Through this new arrangement, Office Depot will become a
participant in the university's Select Vendor Program.
Information on the agreement and the program is available at
Purchasing Services' Web site
www.jhu.edu/~purchasing/.